Today we informed our partners that we are ending the Live Search Books and Live Search Academic projects and that both sites will be taken down next week. Books and scholarly publications will continue to be integrated into our Search results, but not through separate indexes.

This also means that we are winding down our digitization initiatives, including our library scanning and our in-copyright book programs. We recognize that this decision comes as disappointing news to our partners, the publishing and academic communities, and Live Search users. … With Live Search Books and Live Search Academic, we digitized 750,000 books and indexed 80 million journal articles. Based on our experience, we foresee that the best way for a search engine to make book content available will be by crawling content repositories created by book publishers and libraries.

The rest of Nadella’s comments can be summarized as "Microsoft couldn’t figure out how to make any money on this stuff." I remarked when MSN Book Search was announced that the business model was rather vague and apparently altruism was not a sufficient rationale.

Background: Both Google and Microsoft are scanning and indexing printed books for the Web. Both include out of copyright works and both also include copyrighted works where they have reached agreement with the publishers and either now share ad revenue with the publisher or provide purchase links (Google) or plan to in the future (Microsoft). Google, however, also provides what they feel to be “fair use” excerpts of copyrighted works even if they have not reached an agreement with the copyright holder. This has given rise to lawsuits from aggrieved publishers which are still in the courts.

In prepared remarks he is scheduled to deliver Tuesday to a publishing industry group, a Microsoft Corp. lawyer also said Google is cutting into the profits of authors and publishers.

“Companies that create no content of their own, and make money solely on the backs of other people’s content, are raking in billions through advertising revenue,” wrote Thomas C. Rubin, an associate general counsel at Microsoft, in the speech he planned to give at the annual meeting of the Association of American Publishers in New York.

Sounds like a description that could be applied to all Web search providers, or at least the successful ones. As Matthew Ingram notes, “This is almost a word-for-word transcription of the argument that gets trotted out by everyone from the World Newspaper Association to the Belgian agency Copiepresse…” What can Mr. Rubin be thinking?

“But Google’s track record of protecting copyrights in other parts of its business is weak at best,” wrote Rubin. “Anyone who visits YouTube, which Google purchased last year, will immediately recognize that it follows a similar cavalier approach to copyright.”